RBI likely to complete vetting bidders for IDBI Bank by October-end

India's central bank is expected to accelerate a key process of vetting IDBI Bank's potential buyers and complete it by October end, helping speed up the sale of a majority stake in the lender, two government sources said.
 

The federal government, which owns 45.48% of IDBI Bank, and the state-owned Life Insurance Corp of India, which holds 49.24%, together plan to sell 60.7% of the lender.
 

The Reserve Bank of India (RBI) began the vetting process known as 'fit and proper criteria' in April, after Kotak Mahindra Bank, the Prem Watsa-backed CSB Bank and Emirates NBD submitted their initial bid to acquire a majority stake in IDBI Bank.
 

The RBI normally takes about 12-18 months to complete the assessment before allowing an entity to run a bank.
 

"In discussions with the government, the RBI has conveyed that the fit and proper assessment would be complete by month-end," said one of the two government officials, who did not want to be named.
 

Completing the vetting process early could allow the government to invite bids in January-March, targeting a wrap-up of the sale by the end of March, both the officials said.
 

India's finance ministry and the RBI did not immediately respond to emails seeking comment.
 

The IDBI Bank stake sale is part of the government's 510 billion rupees ($6.13 billion) divestment target for fiscal 2024.

However, it is also the only significant divestment the government is focusing on this year, raising concerns about the target being met, as attention turns to the upcoming state and national elections.
 

Once the RBI screening concludes, the government will grant suitable bidders access to confidential data that IDBI Bank has begun collecting, such as employees' pension corpus and insurance or medical covers.